AI will accentuate hyper-personalisation in retail

Already very present in the luxury and retail worlds, the use of artificial intelligence is set to intensify and even ‘transform’ these sectors, according to a study published by Deloitte to coincide with the World Retail Congress, being held in Paris from April 16 to 18. 52% of the brands and retailers questioned for this report said they intended to use generative AI (ChapGPT, Dall-E, etc.) over the next twelve months to create content (publications and reports), and 25% to build brand campaigns and marketing.

Targeting customers is a key factor, especially in the world of luxury. “Brands are increasingly adopting personalised recommendations and targeted advertising to analyse consumer behaviour and preferences in real time,” says the document.

“For those looking to stay one step ahead, hyper-personalisation will be key. Consumers expect brands to understand their individual preferences and offer personalised interactions at every level. These demanding shoppers are looking for seamless experiences that give a sense of exclusivity and importance, in both the physical and digital realms,” says Ida Palombella, from Deloitte Italy’s Fashion & Luxury practice.

Last year, for example, the Prada group teamed up with Adobe to try and improve the consumer experience both online and in-store. Moncler launched a creative campaign with the help of AI, as did Maison Valentino for its Essentials collection.

“In the luxury sector, it’s essential to maintain a consistent brand narrative, and handing control over to a third party can potentially dilute the brand’s positioning,” says Gillian Simpson of Deloitte UK. “By using generative AI tools to create content, whether images or text, luxury retailers can standardise their tone of voice across all communications, while creating the adjustments required for multiple customer segments, geographies, missions…”.

A few points of vigilance and mistrust are also raised. Firstly, the problem of unstructured data, which requires a great deal of storage and processing. The challenge is to isolate qualitative data efficiently. Then there is the issue of personal data protection. To cultivate consumer trust, “luxury retailers must base the design, deployment and communication of AI tools on four fundamental pillars: human connection, transparency, capacity and reliability,” the study states.

Monetising investments

US data hosting start-up Snowflake also unveiled a brief at the conference on AI in the wider property sales sector. It says that in the future, the main applications of AI in retail will involve sales assistants, analysis of market signals and, of course, content creation.

As well as experimenting with the tool, companies now need to monetise their investments and quantify the benefits (or otherwise). Firstly, the time saved, if this is real, and then the financial gain (in particular through cost reductions, which can affect human resources).

The document lists a number of examples of uses of artificial intelligence, some beneficial, others unsuccessful. In the world of clothing, for example, AI-generated product recommendations and virtual outfit trials “have been widely accepted”. But in the world of jewellery or watches, “where a human touch is precious, a virtual assistant may not be ideal”. The same goes for the automotive sector, where purchasing is very complex, says Snowflake.

The possibility of improving customer relations and the messages delivered is also addressed. This is achieved by aggregating and analysing customer reviews left online on various sites, posts published on social networks mentioning the brand, and customer support emails. In short, tracking consumer sentiment.

Another lever is the monetisation of data collected by retailers, which can bring in additional revenue. There is a strong demand for data from third parties on demographics, purchasing behaviour and the most fashionable products.